Coming through in the crunch

Defying daunting odds, Ohio Congressman Rob Portman pushed through retirement reform. Now the confidant of George W. Bush, Portman will be one of the president's point men in a newly reconfigured Congress.

Defying daunting odds, Ohio Congressman Rob Portman pushed
through retirement reform. Now the confidant of George W. Bush,
Portman will be one of the president's point men in a newly
reconfigured Congress.

By Justin Dini
July 2001
Institutional Investor Magazine

Defying daunting odds, Ohio Congressman Rob Portman pushed
through retirement reform. Now the confidant of George W. Bush,
Portman will be one of the president's point men in a newly
reconfigured Congress.

You know you've arrived in George W. Bush's Washington when the
president gives you a nickname. Dozens have been handed out to
politicians whose advice Dubya values, whose support Dubya
needs or whose company Dubya enjoys. Rob Portman, the
45-year-old Republican congressman from Ohio, received his
latest from the president in March.

"I was in the White House, and the president said, 'We're going
to call you the Mule,'" Portman recalls. "He says, 'You are
going to be the pack mule, carrying some of our
legislation.'"

The Mule made good on Bush's charge when he carried the water
for the president in galvanizing House support for his landmark
$1.35 trillion tax cut. At the same time, Portman was hauling
some heavy cargo of his own. At the 11th hour, as the House and
Senate conferred on a compromise plan, the Ohio congressman
managed to slip into the tax package a version of
Portman-Cardin, the retirement reform bill that he has been
carting through Congress with Benjamin Cardin, his Democratic
co-sponsor, since 1997. Their bill gradually raises the cap on
annual contributions to 401(k)s from $10,500 to $15,000 and on
IRA contributions from $2,000 to $5,000.

What made Portman's achievement so notable was that President
Bush had vowed to exclude all business-friendly "Christmas-tree
ornaments" from the legislation in order to ensure its smooth
passage. But Portman, a Bush family friend for two decades,
nonetheless managed to fashion - with Dubya's tacit approval -
the only significant piece of the tax-cut package that did not
originate in the White House.

How was that possible? In the first place, his bill was fairly
popular within the administration, which chose to treat it with
a kind of "benign neglect," says Portman. "The White House
didn't object to the bill, but they didn't support it either.
They had the ability to stop it, and they never did." Then
there was the stunning defection of Vermont Senator James
Jeffords from the Republican ranks. That made it essential to
move the retirement bill quickly, since there was virtually no
chance that a Democratic-controlled Senate would approve a
second tax package.

The showdown for retirement reform came as the conference
committee hammered out the final details of the tax cut in late
May. Tenacious, relentless, convinced that success was finally
within reach, Portman spent 72 hours straight with committee
staffers. Though not a member of the conference, he was the
only legislator allowed to wait in the corridors outside the
various rooms throughout the Capitol in which the committee
deliberated. Portman massaged numbers, answered questions and
crafted strategies to forge a winning consensus. When he left
the Capitol to sleep for an hour or so, he kept his cell phone
and pager on his pillow.

The tricky part - and Portman's great challenge - was to ensure
that retirement reform, estimated to cost just under $50
billion in foregone revenues, could be included without
swelling the total cost of the package to more than $1.35
trillion, the maximum that the Senate was willing to approve.
The centerpiece of Bush's tax package, from the beginning,
was across-the-board reductions in personal income taxes, with
the White House hoping to slash the top rate from 39.6 percent
to 33 percent. The conference committee was willing to go down,
but not that far. Briefly, it appeared that passing Portman's
bill might cost the president part of his cut. "Frankly,
several Republicans approached me and insisted that including
Portman-Cardin would be the difference between cutting the top
rate to 36 percent versus 35 percent," Portman says. In the
end, the committee reduced the top rate to 35 percent. The
legislation also eliminates the marriage penalty tax and will
gradually do away with the federal estate tax; it doubles the
child tax credit and makes a portion of college tuition
payments tax-deductible.

In addition to increasing the caps on IRA and 401(k)
contributions, the tax package includes a host of other pension
provisions. Among them: raising the employer contribution
limits, increasing the cap on catch-up contributions for
workers over 50 and making it easier for workers to take their
401(k) plans with them when they change jobs. It also loosens
current restrictions that the legislation's proponents say
discourage small businesses from offering retirement
plans.

"It's a great victory," Portman declared two hours after
passage of the tax cut, as he flew to the Grand Canyon to meet
his 11-year-old son for a five-day kayaking trip down the
Colorado River. "I've been waiting a long time for this
moment."

So too has the financial services industry, which has in the
past four years lobbied hard for retirement reform. Certainly,
the bill presents a major opportunity for the investment firms
and insurers that will manage the billions in new savings
created by the bill.

"Portman's face belongs on the Mount Rushmore of the financial
services industry," says Stuart Brahs, a lobbyist for Principal
Financial Group, who is quick to credit Cardin, as well as
Senators Max Baucus, Democrat of Montana, and Charles Grassley,
Republican of Iowa, for their roles in getting the pension law
enacted. (Baucus and Grassley included their version of
Portman-Cardin's pension provisions in the tax-cut bill that
passed the Senate after the House had approved its own package
of cuts in April.)

No one has yet projected the likely effects of the higher
401(k) and IRA contribution limits, but they will surely be
substantial, and, of course, the new money comes with no
additional marketing or customer acquisition costs. At the end
of 2000, 401(k) plans held some $1.8 trillion in assets,
according to Cerulli Associates, a research firm. Even without
an increase in the 401(k) cap, Cerulli projects total 401(k)
assets of $3.4 trillion by 2006. IRAs at the end of 2000
claimed $2.4 trillion in assets. By comparison, partially
privatizing Social Security by setting up individual accounts -
Bush's campaign pledge and one of several competing scenarios
for reform of the system - would produce personal account
balances of about $3 trillion by 2015, according to a Social
Security Administration report on a similar proposal.

Portman's work on retirement reform has made him best known to
outsiders as Mr. 401(k) on Capitol Hill, but in George W.
Bush's Washington, he is no ordinary GOP congressman. A friend
of the Bush family since 1981, when he worked as an advance man
for then-vice president George H.W. Bush, Portman draws upon a
close personal relationship with the president and wields more
influence than even many Beltway regulars appreciate.

"Bush knows Rob Portman, he's comfortable around Rob Portman,
and he will say anything he wants to Rob Portman," says
retirement reform co-sponsor Cardin. "And it seems that Rob
Portman would be comfortable saying anything he wants to the
president."

Even as he focused his energies on retirement reform, Portman
played a critical if low-key role this spring in helping to
push Bush's tax cut through the House. As chairman of the
Republican leadership, Portman helped unite GOP representatives
and the White House behind the piecemeal and ultimately
successful approach to getting the tax plan through: passing
the elimination of the marriage penalty as one measure, the
phaseout of the estate tax as another measure and so on. And as
the final details of the tax bill were being hammered out in
conference, Portman acted as the main liaison between the White
House and House Ways and Means chairman William Thomas,
Republican of California, a key player in enacting the tax
cut.

Portman may prove to be an even more valuable ally now that the
defection of Senator Jeffords leaves the Senate under
Democratic control. The congressman is likely to emerge as a
strong voice in fighting to simplify the federal tax code and
in the debate over reforming Social Security. Because Social
Security is such a politically charged issue, Democrats and
Republicans appear likely to postpone the battle until after
the 2002 elections. But the debate has already galvanized
interest groups on both sides of what will almost certainly be
a fierce fight over privatization of at least part of the
system. In May Bush appointed a commission to study reform
options whose members are seen as leaning toward
privatization.

Lanky, unassuming, with an amiable, soft-spoken demeanor that
recalls the Cincinnati tax lawyer he once was, Portman is
sometimes underestimated. But not for long. A relentless,
hard-driving legislator, Portman is known to exhaust his
opponents and inspire the support of his friends.

"Rob Portman is one of the most intense individuals I've ever
met," says Cardin. Last summer, before a House vote on
Portman-Cardin in which the bill would garner more than 400
votes - out of 435 representatives - Portman cornered a fellow
Republican who opposed the bill. "I literally had to pull him
off the member," Cardin recalls. "Rob just never has enough
votes."

Yet Portman is a hard man to dislike. "Rob's strengths come
from his conviction on issues and then his effectiveness in
getting things done," writes former president George H.W. Bush
in response to questions Institutional Investor sent to him.
"Much of this is because he is good with people. He makes
friends, not enemies."

Hill staffers know him as a congressman who loves the gritty
arcana of lawmaking. Portman's mastery of the complex details
of the pension legislation made him indispensable in the hours
leading up to its passage. Of the 186 pages that make up the
tax bill, the pension legislation takes up 85. At 4:00 a.m. on
Saturday, May 26, the day the bill was eventually passed by
Congress, as legislators and their aides pored over the final
details of the bill, "nobody else could make sense of it," says
one GOP House aide. Portman reports that cranky congressmen
were tempted to delete some of the more abstruse pension
language just to speed things along, but he persuaded them to
persevere. "The pension components were very complicated, and
at that point we were all exhausted, but those details made for
crucially important public policy," Portman says.

"If there is one thing that defines Rob Portman, it is that he
is a very serious legislator," says Rick Lazio, who was
Portman's closest friend in the House before losing the New
York Senate race to Hillary Rodham Clinton last year.

And now Ohio Congressman Rob Portman has some very serious
legislation to his name.

Descendants of abolitionists who helped run the Underground
Railroad, Portmans have been living in the Buckeye State since
the mid-19th century.

Rob Portman was born outside Cincinnati in 1955 to Joan and
Bill Portman. His father owned a forklift equipment business,
Portman Equipment Co., now run by Rob Portman's older brother
William (Wym) Portman. (Congressman Portman still owns a small
piece of the business.)

Other than a three-year stint in Cleveland when Portman was a
toddler, the family, which includes Portman's sister Ginna, now
42, lived in two of Cincinnati's tonier suburbs, Hyde Park and
Indian Hill. Both are in Ohio's second district, which Portman
now represents.

He had political ambitions early - as a ninth-grader at the
exclusive Cincinnati Country Day School, Portman ran
unsuccessfully for secretary-treasurer of his class. It was a
"crushing defeat," he now recalls with a laugh, but it was also
the last election he ever lost.

While an undergraduate majoring in anthropology at Dartmouth
College, Portman interned for Willis Gradison, the congressman
he would eventually succeed. In his junior year Portman took a
semester off. Along with a few friends, he kayaked all 1,900
miles of the Rio Grande, which runs from the San Juan Mountains
of southwestern Colorado to the Gulf of Mexico in Brownsville,
Texas. Portman and his buddies covered the distance in two
separate monthlong legs. (Portman keeps a kayak in the House
gym and uses it in the gym pool every morning.) "When Rob
creates his own vision for himself, he will absolutely follow
through until he achieves it," brother Wym says.

Portman graduated from Dartmouth in 1979 and went to work in
Washington. In the spring of 1981, he joined the staff of the
new vice president, George H.W. Bush, beginning a relationship
with the Bush family that has shaped much of Portman's
political career. "I really owe 41 big time," Portman says,
using, of course, the nickname that George W. Bush bestowed
upon his father, the 41st president of the U.S.

After earning his law degree from the University of Michigan
and working for two law firms, Portman served as the Cincinnati
coordinator for Bush Sr.'s 1988 presidential campaign. After
Bush won, the new administration tapped Portman to serve in the
White House, first in the White House Counsel's Office and
later as director of the White House Office of Legislative
Affairs.

In 1991 the president offered Portman the post of staff
secretary, one of the most powerful jobs in the White House.
But Portman turned it down: His mother had been diagnosed with
bone marrow cancer, and Portman wanted to return to Cincinnati
to spend more time with her. (Joan Portman died in 1994.) "He
didn't think twice about it," says Joseph Hagin, a deputy chief
of staff in the current White House who has known Portman since
the fourth grade.

Then, in December 1992, Gradison, who had just won re-election
to the House for a tenth term, decided to step down for a
lobbying job. A special election for his replacement was
scheduled for March 1993.

Portman, then 37, jumped into the Republican primary as an
underdog, taking on well-known former congressman Bob McEwen,
who had served in the House from 1981 to 1992. During the
primary another GOP candidate, wealthy homebuilder Jay Buchert,
tried to smear Portman by linking him to Haitian dictator
Jean-Claude (Baby Doc) Duvalier. (Patton Boggs, Portman's old
law firm, represented the Duvaliers, but Portman hadn't worked
with them.)

Portman implored Gradison, who had pledged that he wouldn't
endorse anyone in the primary, to come out on his behalf.
"Finally, a few weeks before the primary, I agreed to endorse
him," Gradison says. "Rob already had a letter typed up."

Portman clearly shared the sensibility of his district, which
Gradison describes as conservative but not reactionary. And
with a late-inning pitch from Barbara Bush, who taped a radio
ad on Portman's behalf, he won the primary. His margin of
victory: little more than 3,000 votes.

In Ohio's second district, the most solidly Republican in the
state, Portman breezed by his Democratic opponent, Lee
Hornberger, in the general election, snaring 70 percent of the
vote. He has enjoyed a similar majority in each of the past
four elections.

After the 1994 midterm elections, when the GOP, led by Newt
Gingrich and his Contract with America, seized control of both
houses of Congress for the first time in 40 years, Portman
secured a spot on the Ways and Means Committee. Soon after, he
became co-chairman, with then-senator Bob Kerrey, Democrat of
Nebraska, of a commission to examine ways to improve the
IRS.

When he met Portman for the first time, Kerrey recalls, "I
thought he was smart, he was attentive, and he appeared to be
someone you could trust."

The Senate Finance Committee, of which Kerrey was a member,
held hearings in 1996 that allowed taxpayers to testify about
IRS excesses and abuses. The high-profile hearings helped give
IRS reform the momentum it would need to become law. But they
also served the interests of staunch conservatives, who used
the horror stories of ordinary taxpayers to justify their
attempt to gut the IRS.

The hearings set off a stampede of interest in trying to see
how far you could go," Kerrey recalls. "Rob stood up to people
in his caucus and kept the bill in better shape than it
otherwise might've been."

In July 1998 then-president Bill Clinton signed into law the
IRS Restructuring and Reform Act, the most sweeping overhaul of
the agency since 1952. It created a permanent oversight board
and shifted the burden of proof in tax court cases from the
individual to the agency.

That same year, Portman authored legislation that renamed
Central Intelligence Agency headquarters in Langley, Virginia,
the George Bush Center for Intelligence. "I was deeply touched
by Rob's initiative in naming the intelligence HQ for me," Bush
wrote II. "He was the driving force behind this high honor that
really means a great deal to me."

Portman met George W. Bush for the first time at the 1988
Republican convention in New Orleans, when Bush Sr. was
nominated for the presidency and Portman was an Ohio delegate.
"We were backstage. I remember cowboy boots, I remember a
cigar, and I remember a lot of backslapping."

The relationship deepened once Bush Sr. ascended to the
presidency and after Bush Jr. was elected Texas governor in
1994. Dubya told Portman in 1999 that he would run for
president before he officially announced his intentions.
Portman joined the campaign as an unofficial domestic policy
adviser and as a link between the candidate and Hill
Republicans. He played the role of Democratic vice presidential
candidate Joseph Lieberman in helping Dick Cheney prepare for
the vice presidential debate, and he played vice president Al
Gore in Bush's prep debates. The only congressman in Austin on
election night, he later helped monitor recounts in Florida's
Broward and Miami-Dade counties. "It was just miserable," he
recalls.

Portman says he rejected an offer to become a cabinet officer,
because he felt his native intensity would have kept him from
spending time with Jane, his wife of 15 years, and his three
children, all of whom are under the age of 12. "I knew I would
never see my family," says Portman.

His importance to the incoming administration became evident
almost immediately. On December 15, the day after the Supreme
Court ruled in favor of Bush, effectively making him the 43rd
president, House Speaker Dennis Hastert, Republican of
Illinois, declared that Bush should abandon his plans to push
his $1.6 trillion tax cut plan through Congress as a single
package. Instead, he argued, the White House should opt for a
more politically palatable approach, passing the elements of
its tax agenda one at a time. The press seized on Hastert's
remarks as a sign of dissension within the Republican
ranks.

Portman, in a flurry of meetings and phone calls with GOP
congressmen and the Bush team, moved quickly behind the scenes
to assure the White House that Hastert and company were
actually on board. The White House quietly agreed to use
Hastert's strategy. By April the House had passed by healthy
margins bills that provided a tax credit for families with
children and that repealed the inheritance tax and the marriage
penalty tax. The House also pushed through the centerpiece
of the Bush agenda, an across-the-board reduction in tax rates.
Before the end of his first 100 days, the new president watched
his entire tax package sail through one house of
Congress.

Retirement reform proved TO BE A MUCH tougher slog for the
Mule. Portman and Cardin introduced their first piece of
pension legislation on November 2, 1995. That bill (which
became law in 1996 as part of the Small Business Job Protection
Act) established so-called Simple accounts for small businesses
to offer their employees retirement plans. The two then
co-sponsored the Pension Simplification Act of 1995, which also
aimed to make it easier for small businesses to offer pension
plans to their employees. In 1997 the two teamed again to push
for a public pension reform provision that was designed to
prevent cash-strapped local governments from raiding the
pension funds of state and local employees. The provision was
signed into law as part of the Taxpayer Relief Act that
year.

Portman-Cardin seemed to be heading into the homestretch last
July when the House passed the bill by a vote of 401-25. The
Senate Finance Committee then approved the legislation
unanimously in September. Less than two months before the
election, though, congressional Republicans opted to include
Portman-Cardin in their tax cut proposal, legislation that
president Clinton had already vowed to veto. The House managed
to pass a slightly modified version of the bill weeks before
Election Day, but the Senate shelved it.

Ultimately, Congress failed to include the legislation in the
bevy of budget measures it approved in its December lame-duck
session, despite the fact that Clinton had indicated he would
sign the bill if it arrived on his desk. Cardin says that the
legislation was the victim of politics. "A Republican senator
said to me: 'Look, we are not sure we want to give a Democratic
president credit for this thing. We'll pass it quickly next
year.'"

From the start, Portman focused on pension reform for a mix of
reasons, both political and principled. As a politician, he
understood that he could make a name for himself by latching on
to a reasonably obscure cause. "Quite frankly, no one else was
interested in pension reform," he says.

Also, several insurers that were strong proponents of
retirement reform, including Ohio National Financial Services
and Union Central Life Insurance, are headquartered in
Portman's district. He has been naturally attentive to their
concerns.

At the same time, Portman ardently believes that the country
faces a savings crisis. The government should encourage
individuals to save for retirement, he says, and it should
smooth the way for small businesses to aid in that effort.
Portman points to his family's business, which his father
started in 1960. Portman Equipment Co. began offering 401(k)s
soon after they were created in 1981, Portman says. "There are
guys today who have turned a wrench for 30 or 40 years, who
even with this bad market have built up assets of $300,000 or
$400,000 in their accounts," he says. "That is what it's all
about."

Still, some of Portman's critics charge that his retirement
reform does little to help moderate- and low-income earners.
They also argue that his legislation focused mostly on helping
small businesses, not their workers, by weakening the
"top-heavy" provisions that were put in place 20 years ago to
ensure that 401(k)s were equitable. Under those rules, when 60
percent of a plan's assets are in the accounts of the company's
owners and other senior executives, the plan is considered
top-heavy, and the employer must make contributions of 3
percent of pay for all other employees who have worked for the
company at least three years. Portman-Cardin, among other
things, loosens the definition of top-heavy and eliminates
certain requirements to collect data from five prior years, a
provision small businesses found burdensome.

After the Supreme Court declared Bush the winner of the 2000
election, the new president focused almost exclusively on his
proposed tax cut. "I'm going to resist the Christmas-tree
effect of tax policy," Bush said in late February. "I don't
want people putting ornaments on my plan."

Yet Portman vowed to somehow get his bill in. At a decisive
moment, House Majority Leader Dick Armey of Texas stepped
forward to help the cause. "I think [Portman-Cardin] is the
most important thing we can do for the economy," Armey told
reporters on May 2, hours before the House overwhelmingly
approved Portman-Cardin. "I will fight to include this
provision in the [tax] package we send to the president."

Still, the Senate GOP leadership - then-majority leader Trent
Lott of Mississippi and his deputy, Don Nickles of Oklahoma -
made it clear that they planned to cut pension reform out of
the reconciliation bill once it arrived in the conference
committee. Nickles told a gathering of insurance executives on
May 17 that he would work to strip out Portman-Cardin to make
more room in the bill for Bush's proposed cut in the top income
tax rate and a faster phaseout of the estate tax.

As soon as the Senate passed its slimmed-down version of the
tax bill on May 23, Portman huddled in a small hideaway inside
the Capitol with Ways and Means chairman Thomas, who served as
a member of the conference committee that crafted the
compromise bill that Bush ultimately signed. The main obstacle
to including retirement reform in the tax package: A provision
targeting lower-income workers, which moderate Senate Democrats
insisted upon, would dramatically increase the cost of the
bill. "We had a one-pound bag to put two pounds of sugar in,"
Portman says.

The estimated cost of the original House version of
Portman-Cardin, which didn't include the two Senate provisions
geared toward lower-income workers, was roughly $52 billion
over ten years. The Senate version was closer to $80 billion
because of those two credits. Max Baucus, the ranking Democrat
on the Senate Finance Committee and a cadre of other moderate
Senate Democrats including Louisiana's John Breaux, were
insisting that one of its provisions - a tax credit matching
elective contributions of up to $2,000 for low- and
middle-income savers - be included in the final version. That
would cost about $10 billion, and Portman had to find a way to
fit it into the bill. Portman arrived at his meeting with
Thomas armed with three different proposals to ensure that the
numbers added up.

Portman made his numbers work by lengthening the phase-in
period for some of the cap increases. Specifically, he extended
the amount of time during which the increases in the caps on
IRA contributions will take effect (the increase to $4,000
happens in 2005 rather than in 2003, and to $5,000 in 2008
rather than 2005, with $500 annual cost-of-living increases
thereafter) and altered 30 or so other provisions in the bill.
The final estimated cost of the pension provisions: $49.6
billion.

By Friday night May 25, it seemed a safe bet that reform would
make it through. But around 11:00 that night, Portman faced one
final obstacle. The Senate parliamentarian decreed that the
portability provisions - a major feature of the bill designed
to make it easier for workers to transport their 401(k) plans
among the private, public and nonprofit sectors - had no place
in a tax relief bill. Portman and his aides scrambled to
convince the parliamentarian that the portability provisions
would have an impact on the federal budget if workers exercised
them. He succeeded in getting the portability provisions
included, but was consequently forced to jettison some proposed
changes to the Employee Retirement Income Security Act. Among
the changes: making more flexible rules regarding
nondiscrimination testing and reductions in the premiums that
small companies must pay the federal Pension Benefit Guaranty
Corporation. Portman vows to get those ERISA provisions passed
later this year. "The fight is never over," he says.

Throughout those final days, though, Portman continued to play
the good soldier to the White House. When the conference
committee first convened, according to someone close to
negotiations, Thomas held firm on cutting the top tax rate from
39.6 percent to 33 percent, which was in the legislation
originally passed by the House. But Senate negotiators balked -
their version of the tax cut had a top rate of 36
percent.

Portman urged Andrew Card, the White House chief of staff, to
join the discussions to persuade Thomas to soften his position.
Bush weighed in by calling Thomas personally on Friday, and
Thomas soon agreed to the 35 percent that was ultimately
passed.

What's next for Mr. 401(k) now that retirement reform is behind
him? Many in Washington expect Portman to play a significant
role in Social Security reform - whenever that battle is
joined. "Rob Portman will be a major player on Social Security
reform," says Cardin.

Bush campaigned on partially privatizing the Social Security
system, which is projected to go broke sometime in the next
three decades, by diverting some portion, most likely 2
percentage points of the current 12.4 percent payroll tax, into
personal retirement accounts for each individual worker. In May
the president announced the creation of a 16-member bipartisan
commission on Social Security, co-chaired by former New York
senator Daniel Moynihan and AOL Time Warner co-chief operating
officer Richard Parsons, with an autumn deadline to produce a
report. Portman says he met with the president soon after he
appointed the commission, and he has already assigned a staffer
to spend much of his time studying the issue.

It now seems likely that Congress will not begin any serious
discussion of Social Security until after the midterm elections
in 2002. Senator Breaux, a forceful advocate of Social Security
reform, says the chances that the current Congress will reform
the system are "zero to none."

Still, financial services companies, which stand to gain from
the billions of dollars that would flow into personal Social
Security accounts, are moving full speed ahead on the lobbying
front. They have formed a coalition that will reportedly raise
millions of dollars to fund a high-profile advertising campaign
pushing partial privatization. At the same time,
antiprivatization groups like the AFL-CIO are forming alliances
of their own.

Portman is beginning to look into legislation that would
simplify the federal tax code and is also hoping to gradually
eliminate the complicated alternative minimum tax, or
AMT.

Whatever his success with Social Security reform and the AMT,
Portman will likely play an increasingly visible role in the
newly constituted Congress. That reflects both his personal
connection to Bush and his new stature as an effective
legislator who can deliver on a tight deadline.

"Portman's influence and importance have increased
substantially," says one veteran lobbyist. "He's perfectly
positioned to smooth the relationship between the White House
and Congress."

That's no simple task, but neither was retirement reform.

The Portman-Cardin tango

Like an old married couple, Rob Portman and Benjamin Cardin,
co-sponsors of legislation to overhaul the nation's private
retirement system, learned over the years to tolerate their
differences. Where Portman, an Ohio Republican, is generally
reserved and composed, Cardin, a Maryland Democrat, can be
blustery and outspoken. Ideologically, the two diverge on any
number of hypersensitive issues, including, most recently, tax
cuts and even Social Security reform. (In fact, in May Cardin
voted against the $1.35 trillion tax cut bill that included
most of Portman-Cardin.) But after forging a bipartisan
partnership in 1997 to push through their pension reform
legislation, the two congressmen have stuck together.

"History links some names in perpetuity. Ginger Rogers and Fred
Astaire, Rob Portman and Ben Cardin," North Dakota Democrat
Earl Pomeroy joked at a March press conference, after Portman
and Cardin reintroduced their bill for the fifth time.

"I don't know who's Fred and who's Ginger, but I can tell you
that I'm a lot better looking than Rob is," Cardin says.

In a more serious vein, he adds that he and Portman are "a
natural pairing. We both identified an issue and set about
trying to get something done. We both had to have the courage
to take on some of the more extreme elements in each of our
parties, and we did that."

The 57-year-old Cardin, whose father and uncle both had long
careers in Maryland politics, has spent virtually his entire
career in the family business. While still in law school at the
University of Maryland in 1967, he won a spot in Maryland's
House of Delegates, representing northwest Baltimore. He served
in the Maryland legislature for 19 years, becoming Speaker of
the House in 1979. Among his accomplishments: joining forces
with a Republican in a controversial effort to overhaul
Maryland's underfunded state pension fund in 1984.

In 1986 the voters of Maryland's third district, which includes
Baltimore and some of its outlying suburbs, elected Cardin to
Congress. Since he arrived on Capitol Hill, Cardin has teamed
with Portman on overhauling the Internal Revenue Service, as
well as on reforms of federal pension law. Cardin also served
as an adviser to Hillary Rodham Clinton's health care task
force; he remains a forceful voice in the debate over
prescription drug benefits.

At the same time, while an unabashed supporter of president
Clinton and an ardent Democrat, he has cultivated a reputation
for setting aside partisan differences to achieve policy goals
- something not all in his party appreciate. Portman-Cardin
itself, while wildly popular in the House of Representatives,
inspired considerable anxiety among traditional liberal
Democratic constituencies. They argued that the legislation
does little to help lower-income workers and strips away worker
protections in streamlining the "top-heavy" rules
(story).

"We brought all the different groups in, and we made it clear
to them that they weren't going to write a bill," Cardin says.
"It wasn't going to be an industry bill; it wasn't going to be
a labor bill; it wasn't going to be a Republican bill; it
wasn't going to be a Democratic bill."

Says Portman, "Ben has been fantastic, and willing to take the
heat on his side of the aisle."

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